On Jan. 7, 2010, the U.S. Court of Appeals for the Federal Circuit announced a decision that requires the U.S. Patent and Trademark Office (USPTO) to calculate patent term adjustment (PTA) in a manner that could allow additional protection term for many U.S. patents. Wyeth v. Kappos, No. 2009-1120 (Fed. Cir. Jan. 7, 2010). In September 2008, the U.S. District Court for the District of Columbia held that the USPTO’s methods of calculating PTA were incorrect under the statutory requirements of 35 U.S.C. § 154. In its recent decision, the Federal Circuit upheld the lower court’s decision and determined that the statute as written by Congress has been misinterpreted by the USPTO. Accordingly, patentees may be entitled to an additional term of protection for their issued patents.
The Patent Guarantee Act of 1999, codified at 35 U.S.C. § 154(b), and effective for utility patents issuing from applications filed on or after May 29, 2000, provides three distinct means of PTA, referred to as “delays”:
1) “A Delay”: Guarantees extension of patent term due to the USPTO’s failure to meet deadlines for examining a patent application (e.g. failure to issue a first office action within fourteen months, failure to respond to the Applicant’s reply within four months, etc.). 35 U.S.C. § 154(b)(1)(A).
2) “B Delay”: Guarantees extension of patent term due to the USPTO’s failure to issue a patent within three years of filing a patent application. 35 U.S.C. § 154(b)(1)(B).
3) “C Delay”: Guarantees extension of patent term due to the involvement of a patent application in an interference, a secrecy order, or a successful appeal. (35 U.S.C. § 154(b)(1)(C)).
However, the statute also provides that a patent’s final PTA is reduced by any “overlap” in the prescribed periods of delay. Specifically, the statute provides that “the period of any adjustment [cannot] exceed the actual number of days the issuance of the patent was delayed.” 35 U.S.C. § 154(b)(2)(A). Therefore, different periods of delay cannot be “double-counted”; if a calendar day is included under more than one period of delay, then it only accounts for one day of PTA. The issue in Wyeth concerned when the periods of delay overlap and how this determination affects the calculation of PTA.
Beginning in 2004, the USPTO has interpreted “A Delay” as contributing to “B Delay,” and, thus, considers the periods of delay to overlap. In other words, the USPTO contended that delays that occur during the “A” period (e.g., delay in issuing office actions, delay in responding to replies, etc.) cause the delays that accumulate during the “B” period (i.e., application pendency in excess of three years). According to the USPTO’s view, the period of “B Delay” begins on the day that the application is filed. Effectively, the USPTO calculated PTA for issued patents as the greater of the “A Delay” or the “B Delay,” but not both.
Wyeth challenged the USPTO’s methods of calculating PTA for two of its issued patents and argued that “A Delay” and “B Delay” only overlap if they occur on the same calendar day. Thus, Wyeth argued that the period of “B Delay” does not begin until the patent application has been pending for three years. Accordingly, Wyeth contended that PTA should be the sum of the “A Delay” and the “B Delay” that do not occur on the same calendar day.
In its decision, the Federal Circuit agreed with Wyeth’s interpretation of delay overlap and held that calculation of PTA for issued patents is the sum of “A Delay” and “B Delay.” In interpreting the PTA statutes, the Federal Circuit stated that “no ambiguity” exists in the statutory language and found that “[e]ach ‘period of delay’ has its own discrete time span” with clearly defined boundaries. Wyeth, slip op. at 7, 8. Specifically, the Court determined that the period of “B Delay” begins three years after a patent application is filed and ends when the application is issued. Accordingly, “[i]f an A Delay occurs on one day and a B Delay occurs on a different day, those two days do not ‘overlap’ under section 154(b)(2).” Id. at 8.
Although the Federal Circuit acknowledged that the PTA statute as written could “result in some imbalanced treatment of similarly-situated patentees,” it stated that the USPTO’s “strained” interpretation of PTA calculation “cannot be reconciled with the language of the statute.” Id. at 8, 9. Therefore, a patentee should be awarded PTA equaling the sum of the “A Delay” and the “B Delay” accumulating during the pendency of a patent application, less any overlap that occurs on the same calendar day.
In the time since the Federal Circuit’s decision, the USPTO has announced that it will not seek further appeal of the case. Instead, the USPTO states on its website that guidance is currently being prepared “for expediting requests for recalculation of patent term adjustment” according to the holding in Wyeth. The USPTO will present the new guidance “as soon as possible.”
Although the content of the USTPO’s new PTA guidance is uncertain at this time, it is advisable for all patentees to review their recently issued patents for erroneous calculations of PTA. For patents granted within the last two months, patentees may consider filing a request for reconsideration of PTA under 37 C.F.R. § 1.705. Additionally, for patents granted within the last 180 days, patentees may consider using other petition strategies in the USPTO or filing a civil action against the USPTO Director under 35 U.S.C. § 154(b)(4)(A) if a request to reconsider PTA has previously been denied. Furthermore, other alternative avenues can be pursued to challenge the calculated PTA for patents issuing before these prescribed time periods.